Lier Chemical (SZ:002258) EBSCN·2024-11-06 17:04Investment Rating - The report maintains an "Accumulate" rating for the company [4]. Core Views - The company's performance in Q3 2024 was under pressure due to a significant decline in the price of glyphosate, which has dropped to historical lows [2][4]. - The company is actively advancing the construction of its refined glyphosate production capacity, with several projects underway [3][4]. Summary by Sections Financial Performance - For the first three quarters of 2024, the company achieved revenue of 5.188 billion yuan, a year-on-year decrease of 13.62%, and a net profit attributable to shareholders of 132 million yuan, down 76.44% year-on-year [1]. - In Q3 2024, the company reported revenue of 1.859 billion yuan, an increase of 20.91% year-on-year but a decrease of 4.13% quarter-on-quarter; the net profit attributable to shareholders was 39 million yuan, down 51.42% year-on-year and 13.47% quarter-on-quarter [1][2]. Market Conditions - The average market price of glyphosate in China was 56,000 yuan per ton in 2023, a year-on-year decline of 36.5%, and it further decreased to 50,000 yuan per ton by November 4, 2024, down 28.6% from the beginning of the year [2]. - The company's gross margin for the first three quarters of 2024 was 16.3%, a decrease of 8.6 percentage points year-on-year [2]. Production Capacity and Strategy - The company operates seven production bases and is the largest producer of chlorinated pyridine pesticides and glyphosate in China [3]. - As of June 2024, the company's subsidiary had a refined glyphosate project with an annual capacity of 20,000 tons that was operating normally, while another project with a capacity of 10,000 tons was still under construction [3]. - The company has initiated registration and market layout for refined glyphosate in multiple countries, completing registration in five countries [3]. Profit Forecast and Valuation - Due to the continued low prices of glyphosate, the profit forecasts for 2024-2026 have been revised downwards, with expected net profits of 190 million yuan (down 74.0%), 324 million yuan (down 60.5%), and 437 million yuan (down 53.8%) respectively [4].